Gold demand in Apr-Jun sinks 70 per cent

Gold demand in Apr-Jun sinks 70 per cent

Speaking to IANS on the consumer demand in India, Somasundaram PR, Managing Director for India at World Gold Council (WGC) said: "This is the second lowest quarter we have ever seen". Apart from the investment demand, silver is also a key component in electric vehicles and as the demand for the latter rises, the metal will also be in demand.

He said, demand for jewellery dropped by 74 per cent to 44 tonnes, in an atmosphere of fear and uncertainty where weddings were postponed or just turned out to be uncharacteristically quiet and private. "Consumer demand took a brutal hit".

The COVID-19 pandemic impacted the consumer sectors of the gold market in H1 2020, with total demand dropping by 6% to 2,076t versus the same period in 2019, according to the World Gold Council's latest Gold Demand Trends report.

The price of gold averaged $US1,711/oz in the second quarter, up by 8% from the previous three months and 31% above the level seen over the same period of a year ago.

"For gold demand to survive, the economy has to do well", Somasundaram said.

A sense of optimism is developing amongst trade, however, that, by Dhanteras, COVID-19-related disruptions may matter less as society learns to live with it, with a possible upside following some positive news on treatment.

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The pandemic is still accelerating in many countries - including the two worst affected, the United States and Brazil. The U.S. now has more than 4.3 million confirmed cases of the virus, also the most among all world nations.

Also Read | Friendship Day 2020 Date in India Calendar: Know Significance Behind Celebrating Friendship Day on First Sunday of August Every Year. The lockdowns implemented across Asia, Europe and North America severely disrupted the consumer-focused sectors of the market, with jewellery demand falling to unprecedented low levels.

The price is now a life-time high of over Rs 50,000 per 10 grams, a key milestone and response is naturally mixed with content investors and wary consumers and to put it in perspective, gold prices have risen by 60 per cent since January 2019 and 20 per cent since January 2020, income growth or expectation have not kept pace with this, Somasundaram said.

"Q2 2020 was defined by lockdowns and high prices, both of which acted in combination to keep India's gold demand record low at 63.7 tonnes, down 70%". "There is also a lot of anxiety among people regarding incomes and lot of people from the unorganised sector are not doing much business. They would like to invest their savings in some instrument and gold may emerge as a preferred choice", he said.

Meanwhile, Refinitiv said the June quarter saw physical gold demand fall to 677 tonnes - its lowest levels since the March quarter of 2009 as record-high gold prices led to a drop in consumption. "There is a lot of probability involved and therefore WGC will not like to peg any figure for second half demand".

Recycling of gold within the nation additionally declined by 64 per cent to 13.Eight tonnes through the interval, from 37.9 tonnes in the identical interval a yr in the past.

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